I don't know, I guess it depends if all 4 players are facing the monitor straight on or not. If I were to take that Analog KADSTICK picture you have, set it on the side of an arcade machine and play from there I am not going to be confused on which way is up or down. I might actually be confused if I push up from the way the buttons are positioned and it does not go up.
Not sure if the KADESTICK is the best example for the point you're making here. Maybe substitute your choice of hand-held console controllers?
There is a large difference between how you orient yourself with a small portable hand-held console controller versus a large fixed arcade control panel.
With a hand-held console controller you have both hands gripping the controller which naturally triangulates it to your body and creates an internal mental orientation "index" even if you're sitting at an angle slightly off to the side of the TV.
If you change the angle you're sitting at relative to the TV, odds are you'll keep the same grip on and positioning for the controller relative to your body which will keep the same mental orientation "index".
With a large fixed arcade control panel, you can't move the panel to orient it to your body so the orientation has to be external.
If the P3/P4 sticks are angled, you have to stand in exactly the right place to orient yourself to the stick or train yourself to adjust to the different angle. Changing P2 from your friend 'Beanpole' Bob to your other friend 'Stout' Sammy can move your position relative to the P4 stick 5-10(?) degrees which can throw off your ability to consistently hit the desired directions.
If the P3/P4 sticks are not angled, it's easier to change the angle you're standing at because the stick is oriented to the monitor.
On a Gauntlet cab, the outer players will definitely not be facing the monitor straight on -- more like 45-60(?) degrees, but you can tell that Atari didn't angle the sticks because the carriage bolt holes are aligned with the front edge of the monitor.

Scott